The WACC of Global Brokerage Inc (GLBR) is 12.8%.
| Range | Selected | |
| Cost of equity | 5.10% - 154,102.90% | 77,054.00% |
| Tax rate | 20.70% - 24.60% | 22.65% |
| Cost of debt | 9.20% - 23.90% | 16.55% |
| WACC | 7.3% - 18.3% | 12.8% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | -6060.71 | 22538.85 |
| Additional risk adjustments | 27880.5% | 27881.0% |
| Cost of equity | 5.10% | 154,102.90% |
| Tax rate | 20.70% | 24.60% |
| Debt/Equity ratio | 508047.23 | 508047.23 |
| Cost of debt | 9.20% | 23.90% |
| After-tax WACC | 7.3% | 18.3% |
| Selected WACC | 12.8% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for GLBR:
cost_of_equity (77,054.00%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (-6060.71) + risk_adjustments (27,880.75%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.